Fair Oaks Income Share Discussion Threads

[cwa1] 09/9/2021 06:14

Half year report...



Highlights

-- The Company's Net Asset Value ("NAV") return per 2021 Share was +17.1% (30 June 2020: -33.3%) for the six month period ended 30 June 2021 on a total return basis (with dividends reinvested).

-- As at 30 June 2021, the Company's total market capitalisation was US$317 million, comprising US$276 million of 2021 Shares and US$41 million of Realisation Shares.

-- The Company's 2021 shares closed at a mid-price of US$0.6675 on 30 June 2021. The 2021 Shares traded at an average discount to NAV of 1.76% during the six month period ended 30 June 2021.

-- The Company's Realisation shares closed at a mid-price of US$0.6650 on 30 June 2021. The Realisation Shares traded at an average discount to NAV of 1.71% during the six month period ended 30 June 2021.

-- On 19 April 2021, the Company announced the result of its reorganisation proposal, being that 62,562,883 2017 Shares had been elected for re-designation as Realisation Shares, representing 13.4% of the 2017 Shares in issue, and 405,815,477 2017 Shares were re-designated as 2021 Shares, representing the balance of 86.6% of the 2017 Shares in issue (including 650,000 shares held in Treasury). The purpose of the reorganisation was to allow those Shareholders who wished to extend the life of their investment in the Company beyond the planned end date of FOIF II LP ("Master Fund II"), to be able to do so by having their 2017 Shares re-designated as 2021 Shares, with such 2021 Shares investing in a new master fund, FOMC III LP (the "Master Fund III"), which will have a planned end date of 12 June 2028 and an investment objective and policy substantially similar to that of Master Fund II.

-- The Company declared dividends of 4.75 US cents per 2021 Share and Realisation Share in the six month period ended 30 June 2021. Cumulative dividends since the inception of the Company per 2021 Share are 71.55 US cents.

[cwa1] 21/8/2021 22:43

Lo Cerrito

No, I took a small slice of the pie myself, so your definitely didn't get mine 🙂

[cerrito] 21/8/2021 20:04

CWA1
Not sure if you sold or bought. If you sold I bought yours as I did an increase partially inspired by Liberum's upbeat comments posted on the VTA board.

[cwa1] 18/8/2021 09:02

Taken a little slice here pre the XD date tomorrow

[rambutan2] 16/6/2021 12:01

I agree Cerrito, they are sailing a fair wind well:

[cerrito] 16/6/2021 09:59

I thought that the NAV for May as reported today was impressive but the market seems to have a different take.

[caternia] 29/4/2021 11:56

Thanks for that. Just phoned AJ Bell something wrong with their system , showing the wrong holding. Said they hope to put it into Fair 2021 in the next few days.

[scrwal] 29/4/2021 11:42

FA17 are the default realisation shares - they should be converted to FAIR 2021 shares very soon. Interactive Investor changed mine last Friday.

The only problem now is that you can't buy any shares until the new KID is issued - you can sell.

[caternia] 29/4/2021 10:24

Thanks for that. I see A J Bell have put me in FA17 - does anyone know was that the default account. Thanks

[grahamg8] 26/4/2021 06:48

Caternia, sorry to hear you feel that you made a mistake. Your overall position will depend on timing and price paid. I first bought FAIR early in 2015 at 105.3c. Dividends since then 42.71c so just about break even at todays price. Other buying points have been a lot better, down to a lowest price paid of 48.53c in September 2020.

I think the lesson isn't so much as don't chase high dividends but keep an eye on all your investments over time.

[caternia] 23/4/2021 15:35

Just spoke to A J Bell, advised the default position was transferred to the 2021 shares. They said will take a few days to transfer over.

[caternia] 23/4/2021 14:21

Afraid to say, I have not kept an eye on this stock.

I am looking at a 40% loss on these shares , although I have not taken into consideration the income I have received.

I have 2 questions which I hope someone can answer.
1. As I have Fair shares and did not buy the new ones will Fair continue or will the company just redeem my shares ( if so what price)

2. If Fair continues will I still get dividends and be able to sell.

I now realise that Fair and KKVL were big mistakes as I wrongly chased big dividends.

Thanks for your help

[scrwal] 23/4/2021 12:54

Holding now showing correctly as the 2021 shares and FAIR.

Unfortunately you can't buy them as no KID/KIID document is available yet. You can sell them though.

[scrwal] 22/4/2021 17:34

ii have responded that the new shares won't be issued to them until 26th April and when received they will be credited to my account and the 2017 shares removed.

[scrwal] 22/4/2021 12:28

ii seem to have mucked up my holding as it is now showing as realisation shares even though I completed the corporate action to have the 2021 shares. The holding has a code FA17 there are no other codes for the company. The shares are showing a 7% loss.

[grahamg8] 19/4/2021 17:55

Although resolution 1 and 2 got through there was quite a big vote against. I'm guessing the opposition to resolution 3 was based on the drag such a large number of potential new shares would have on our new 2021 share price, or old 2017 shares for that matter.

The bosses need to be reminded from time to time that they are servants of the shareholders and not the other way round.

[cerrito] 19/4/2021 08:59

Did anyone take the realizatioin share option?
I did not. The point that they made in the prospectus about illiquidity of these shares was correct.
I went for the realization shares the last time this happened and with all the part realizations it was rather cumbersome.
We should learn later today if indeed there was enough demand for the realization shares.
I pondered in rather a vague way about buying more but as a £ investor decided I had enough US$ exposure,

[grahamg8] 29/3/2021 07:01

Sorry about the double post, for some reason ADVFN won't let me delete the text.

As expected another roll over into longer dated shares. I was very suspicious of this last time (2014 shares) but it all seemed to work perfectly fairly. We just need to keep track of what will for a while be three lots of shares in circulation: 2017 shares, 2021 shares and C shares.

Also confirmation that the norm now is quarterly dividends. Looking forward to the next one in May.

[grahamg8] 29/3/2021 07:01

As expected another roll over into longer dated shares. I was very suspicious of this last time (2014 shares) but it all seemed to work perfectly fairly. We just need to keep track of what will for a while be three lots of shares in circulation: 2017 shares, 2021 shares and C shares.

Also confirmation that the norm now is quarterly dividends. Looking forward to the next one in May.

[grahamg8] 11/3/2021 07:38

NAV is actually down. What they don't explain is that the 2.5c dividend has been taken off the previous months NAV before working out the change. Poor communication rather than devious to not tell us how the figures were worked out. Stellar performance is slowing but still very healthy and looks to be enough for the next quarter dividend of 2c to 3c.

[davebowler] 18/2/2021 10:24

Liberum;
Event

Fair Oaks Income Fund's NAV per share at 31 January 2021 was $0.664, representing a 5.3% NAV total return in the month. January's NAV performance benefited from upward revaluations in certain investments with short reinvestment periods. Rising loan prices have increased the liquidation NAV for the equity tranche holders. There is further potential upside for these positions from refi/reset activity.

Loan markets were broadly positive in January, with returns of 1.2% in the US and 1.0% in Europe. Loan prices have benefited from rising demand from retail inflows into US loans funds as investors seek floating rate exposure due to a steepening yield curve. 12-month trailing default rates have continued to decline and are now 3.4% in the US (previously 3.8%) and 2.1% in Europe (previously 2.6%).


CLO spreads on new issues have compressed further in January. AAA US and EU new issue spreads fell to 1.15% and 0.87% at the end of January compared to 1.32% and 1.06% in the prior month. The positive environment should create opportunities for CLO equity holders to refinance or reset the CLO liabilities at more attractive levels.

Master Fund II is nearing the end of its investment period. As previously indicated, FAIR will offer shareholders the opportunity to participate in a new share class that will invest in a new Master Fund, similar to the approach taken by the fund in 2017. The new Master Fund will reinvest principal receipts received from the current Master Fund in a new pool of assets, with a fixed investment period and maturity.

Liberum view

The tightening of CLO liability spreads is set to continue as investment demand strengthens. In combination with improving fundamentals (lower default rates, rising OC test cushions), the environment for CLO equity and mezzanine returns remains very favourable. Significant refinancing activity is expected in 2021. Equity tranches should benefit from a lower cost of capital, resulting in higher expected IRRs. Debt tranches also offer upside through repayment at par and we note several of FAIR's CLO debt tranches experienced large price increases during January. FAIR's flexible mandate leaves it well-placed to capitalise on relative value opportunities across CLO structures.

[cerrito] 09/2/2021 17:33

Davebowler, I have just seen your 478 on the VTA thread covering Liberum on Fair.. A forecast for a 26pc NAV increase caught my eye noting the decent December 20 NAV performance although that the buy price today at 65 is higher than the 311220 NAV.
My question to myself is as a £ investor at these exchange rates do I want more US$ assets.

[grahamg8] 02/2/2021 07:40

13 November 2020 post 142: Biden stimulus package - check, Covid vaccine - check, more income - 2.5c check, share price growth - check.

The world has moved on a long way in 10 weeks and FAIR seems to have stabilised which is great news. I'm particularly pleased with the reference to 'quarterly' dividend. That sounds like a lot of confidence going forward, even if the size of the dividend may be a bit lumpy.

[rambutan2] 14/12/2020 21:10

As at the close of business on 30 November 2020 the estimated unaudited Net Asset Value of the Company's Shares was as follows:

Fund Name: Fair Oaks Income Limited
NAV 2017 Shares USD: 0.5877
Monthly Performance: 6.95%

[grahamg8] 27/11/2020 17:31

NASA started assembling the SLS rocket on 19 November. The biggest in the world (of course), just about matched by the FAIR share price with a bit of luck.